Contents INTRODUCTION 5 EXECUTIVE SUMMARY 6 ONLINE ART SALES FACTS AND FIGURES 7 KEY MOMENTS FROM THE LAST 13 MONTHS 8 IMPACT OF SOCIAL MEDIA 10

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2 Contents INTRODUCTION 5 EXECUTIVE SUMMARY 6 ONLINE ART SALES FACTS AND FIGURES 7 KEY MOMENTS FROM THE LAST 13 MONTHS 8 IMPACT OF SOCIAL MEDIA 10 DETAILED FINDINGS 12 VISITOR TRENDS 13 CLICK-AND-BUY TRENDS 14 WHAT ARE PEOPLE BUYING? 17 WHY BUY ART ONLINE? 18 RESPONDING TO THE CHALLENGES 20 WHAT ARE THE DISADVANTAGES OF BUYING ART ONLINE? 20 RAW FINDINGS 24 METHODOLOGY 29 COMPANY PROFILES 30 The Hiscox Online Art Trade Report

3 Introduction Introduction It s been two years since our first Hiscox Online Art Trade Report was published and much has changed. The online art market has gathered pace and has now established some meaningful foundations. Robert Read Head of Fine Art, Hiscox robert.read@hiscox.com The value of the global online art market has risen from just under $1 billion in 2013 to an estimated $2.64 billion this year. The figures speak for themselves. The evolution of online art sales mean that the value of the global online art market has risen from just under $1 billion in 2013 to an estimated $2.64 billion this year. Based on that growth trajectory, we estimate it to be worth $6.3 billion in 2019; no mean feat. Art buying patterns and motives are changing: almost half of this year s respondents said they had bought art online in the last 12 months, up from 38% last year, and investment return is a growing motivation with art seen as an increasingly tradable asset online. Online auctions continue to drive growth, with online-only players such as Auctionata and Paddle8 reporting revenue increases of 148% and 146% respectively in However, the same growth pattern can also be seen amongst more traditional players: Heritage Auctions, for example, has become one of the biggest online auctioneers in the world, with $357 million worth of online sales in A similar trend is evident with regional players, not least the Swedish auction house Bukowskis, which has seen strong growth in its online business Bukowskis Market, and Danish online auction house Lauritz.com which, recently moved to acquire one of Sweden s oldest auction houses. The rules are changing, and the online art market continues to force the new and old art worlds to adapt. With scale and size being key factors for survival in this fiercely competitive online market, the last 12 months also saw headline-grabbing acquisitions, M&A transactions, and joint ventures such as the partnership between Sotheby s and ebay. In the future, we believe the line between offline and online art markets will become increasingly blurred, as consumers come to expect the flexibility and convenience they get from a multichannel art-buying experience. Social media has a part to play too as it is irreversibly changing the way consumers find, engage with and buy art. Although the online art market is still small, relative to the overall art market, it is already demonstrating its worth as an important platform and incubator for the next generation of buyers and collectors. This desire for an omni-channel experience is sure to prevail. However, there are too many players in the online art market, as one would expect at this stage of the development cycle, and it is still unclear who the winners will be. We will have to wait for a couple more years of mergers, acquisitions, thrills and spills to see who emerges on top. We hope that our ongoing research into the online art market continues to provide valuable insight in a way that is useful to our clients, those involved in the art world and those simply with a passion for art. Plan B Harland Miller 4 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

4 Executive summary Online art sales facts and figures Executive summary Online art sales facts and figures Online art market reaches $2.64 billion. Online art sales shifted up a gear last year, as global online art and collectibles sales platforms gained traction. Auctionata announced a 148% increase in auction sales and Heritage Auctions sold $357 million worth of art last year, up 42% from 2013, to become one of the world s largest online auction houses. Investment return is a strong motivation for online art buyers. Emotional benefits remain important motivations for buying art online, however as many as 63% are also motivated by value potential or return on investment. The investment motivation is even higher among new art buyers (defined here as those who started buying art less than three years ago), as 75% said they were driven by the value potential when buying art online. This suggests a strong trading mentality and the potential for online art marketplaces to succeed as transactional platforms. However, are expectations too high among new art buyers? Will they vote with their feet if the online art market fails to deliver attractive returns? The trend for click-and-buy 1 art is gathering steam. 49% of respondents said they had purchased art and collectibles directly via an online art platform, up from 38% last year, showing significant progress towards mainstream adoption. It is proving particularly popular with new art buyers (defined here as being those who have collected art for less than one year), 24% of which said they had bought art online over the last year. This may be, at least in part, due to the fact that 45% of respondents said they found the online art buying experience less intimidating than buying from a physical gallery or auction house (up from 39% last year). The bulk of online transactions take place below 10, % of online art buyers said they bought art online at a price point below 10,000. Of these, 41% of those surveyed said their average price paid was less than 1,000 (up from 37% last year), 26% said it was between 1,000 and 5,000, 17% between 5,000 and 10,000, and 16% above 10,000. Among new art buyers, the majority (51%) said the average price for purchases was less than 1,000. Online art buying is becoming an omni-channel experience. 91% of online buyers surveyed had bought from a physical gallery or auction house before they bought art online, and of these, 48% said they still preferred the physical space down from 56% last year. However, 15% preferred the online experience in 2015, compared to 10% last year, and 37% had no preference compared to 34% last year. This suggests that art buyers are becoming less dependent on the physical gallery or auction house and that there is an increasing level of indifference between the channels that collectors want to use when buying art. Going forward it will be critical to offer potential art buyers a choice of channels when acquiring art. Social media is likely to play an important role in driving future online sales. 41% of respondents said they discovered an online art sales platform through social media (up from 33% last year). Facebook and Instagram are considered the two most important social media channels in the art world. We estimate the value of the online art market to be $2.64 billion for 2014, up from $1.57 billion in $1.57bn $356.6 million 2014 $2.64bn Maintaining the same growth rate as last year of 19%, which is what the slightly more mature online luxury goods market is forecasted to grow at according to the McKinsey Altagamma Report from 2012, we estimate it will be worth $6.3 billion in % +146% 2019 $6.3bn 52% of the online buyers surveyed say they are likely to buy more art online in the next 12 months than in the last 12 months, followed by 34% who say they will by the same amount. This supports the 12 month growth rate of the online art market. A number of online art auctions and marketplaces have seen triple-digit growth over the last year. growth in online sales in % $41 million $35.8 million $35.1 million +42% Heritage Auction Auctionata Paddle8 Christie s Online Methodology This year s global online estimate is based on publicly available sales figures, as well as sales estimates from the main online art and collectible sales platforms that are mentioned in the appendix of this report. We are fully aware that these online art sales platforms do not represent the entire population of online art sales businesses, and therefore our estimates are likely to be on the conservative side. 1 Click-and-buy is defined as online purchases made directly (sight unseen) through an e-commerce platform with little or no direct contact between the buyer and seller. Close to half of the total online sales are driven by rapidly growing online art and collectibles auction platforms such as Heritage Auction, Lauritz.com, Auctionata, Paddle8, and auction aggregators such as The-saleroom.com, LiveAuctioneers.com and Invaluable.com. Online sales generated by these companies account for an estimated 48% of the $2.64 billion online sales total. 6 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

5 Key moments from the last 13 months Key moments from the last 13 months Key moments from the last 13 months Partnerships Acquisitions Launch of online art ventures Fundraising/Investments Online sales th March th June st July th August th August th September th October th November 2014 SOTHEBY S AND EBAY Sotheby s announces a new partnership with ebay as part of a redesigned online auction strategy. Items such as jewellery, watches, prints, wine, photographs and some fine art and antiques start to be auctioned via live-stream in April THE SPACE A new digital arts platform set up and supported by Arts Council England and the BBC launches. The Space commissions established and emerging artists to explore new digital methods of creating, with Ai Weiwei being one of several major artists to participate. ARTBINDER ArtBinder, an app allowing art galleries to manage and present artworks to clients remotely (via tablet or smartphone), raises $3.17 million in a Series A funding round led by Index Ventures. Other investors included Leon Black, CEO and Founder of Apollo Global Management. SAATCHI ART AND DEMAND MEDIA Santa Monica-based digital company Demand Media confirms its purchase of Saatchi Art for approximately $17 million in cash and stock. ARTSPACE AND PHAIDON Book and media publisher Phaidon announces their purchase of online art sales platform Artspace, for an undisclosed amount. LAURITZ.COM AND STOCKHOLM AUKTIONSVERK Lauritz.com, Scandinavia s largest online auction house acquires the world s oldest auction house, Stockholm Auktionsverk (est. 1674). Total annual turnover in the Lauritz.com group now expected to top 160 million in EBAY ebay, one of the world s largest online marketplaces, launches live auctions for premium art and collectibles, opening the doors of traditional brick-and-mortar auction houses to online shoppers around the world. Its first auction was hosted by Swann Auction Galleries on African-American Fine Art. ARTICHECK Launch of Articheck, a London-based digital platform that enables users to create faster, easier and more professional condition reports on ipad and iphone th January th February th February th March th March th March st April 2015 HERITAGE AUCTIONS Heritage Auctions expands its worldwide online auction sales lead. In 2014 Heritage Auctions reported online auction sales of more than $356.6 million, making it a dominant player in the online auction space and representing an increase of 42% year-on-year. CHRISTIE S AND COLLECTRIUM Christie s announces its purchase of online collection management platform Collectrium for a rumoured $16 million. The acquisition strengthens Christie s in-house collection management system and its ability to sell collection management services to non-client collectors. ARTA ARTA, an online art shipping company, launches with the aim of disrupting the art shipping business. The platform connects galleries, collectors and art advisors with shipping companies that specialise in transporting art. BITCHCOIN BitchCoin, a digital currency backed by the photography of Sarah Meyohas, launches. BitchCoin allows art collectors to invest directly in Sarah Meyohas as a value producer rather than investing in the artwork itself. For investors, BitchCoin is like any currency tradable on the open market. ARTSY Catterton Partners lead a $25 million Series C funding round for Artsy, less than a year after the company s Series B funding round. To date, Artsy has raised approximately $51 million in funding. AUCTIONATA Auctionata completes its Series C financing round with a total new investment of 42 million (US $45 million). The round was led by stock-listed MCI Management from Warsaw and additional investors were Hearst Ventures from New York, Kreos Capital from London and Yuan Capital from Hong Kong. SOTHEBY S AND EBAY a new live auctions platform launches with photographs and a themed New York sale. 8 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

6 Impact of social media Impact of social media Impact of social media SOCIAL MEDIA TAKES OFF IN THE ART WORLD Although art appreciation and collecting is sometimes a solitary process, more often it is bound up in personal relations with others and a sharing of tastes and knowledge. In fact, few industries are so rooted in personal relations and the opinions of others as the art market is; fewer still prize a direct connection with the creative origin, or the maker, of the items for sale. The market thrives on interest and debate, not simply amongst dealers and collectors, but also critics, curators, artists art enthusiasts. In this way, social media naturally aligns with the core structure of the art world, and market ecosystem, whilst also influencing the traditional balance of power amongst key constituents. Works listed on social networks are aimed at attracting the attention of those 91% of online (prospective) buyers who spend anywhere from one to 12 hours on social media per day, with 79% spending up to three hours per day, and potentially directing web traffic to the online selling platforms. In 2015, 41% of respondents said they had discovered an online transactional art platform through social media, up from 34% last year. While 47% state there is no correlation between social media and the art they buy online, 24% of buyers said they recognised the link and 30% said they were unaware of its affect on their buying habits. As the social media ecosystem continues to narrow the gap between personal and professional internet use, the influence of social media on buying habits will become stronger and more apparent. USAGE AND PLATFORM DISTINCTIONS Facebook and Instagram are the two most important social media platforms in the art world, although each of these channels serves a different purpose. 52% of respondents said Facebook was among the most important social media channel for art-related purposes, followed by 34% who said Instagram was the most important. Facebook s first place position is not surprising as the network is globally ranked second only to Google.2 As such it is one the best examples of an environment in which buyers interact on personal and professional levels concurrently. Facebook and Instagram are the two most important social media channels in the art world. Instagram, with an active user base in WHICH SOCIAL MEDIA CHANNEL excess of 300 million and over 70 million DO YOU USE MOST FOR ART images shared on average per day, is now RELATED PURPOSES? larger than Twitter.3 Crucially, last year Instagram saw a per-follower engagement rate 58 times higher than Facebook and 120 times higher than Twitter,4 a fact that 52% our statistics for this year are beginning Facebook to reflect with Instagram beating Twitter 34% in every category except art related Instagram news and find[ing] openings and exhibitions (both of which Facebook 3% Flickr 5% Tumblr in turn dominates with 40% and 53% 27% respectively). The engagement factor LinkedIn 26% of both Instagram and Facebook far Twitter outweighs their stereotypes of photo 11% Pinterest sharing or social updates, with their 9% ArtStack success based instead on how easily users can interact with content. This is clear when Flickr s 3% art related share is examined; while this site also caters for image sharing, it s engagement with users is not comparable. INFLUENCING THE ART BUYING PROCESS Social media is also aiding validation and increasing buyer confidence. 24% of respondents said that social media activity had an influence on their art buying decisions, with postings by museums, galleries and artist studios deemed to have the most influence on buyers closely followed by collectors, art market commentators and curators. This confirms that no one single voice has a disproportionate influence, but that the influence is spread across different opinion-makers in the art market. Lewis Lake Matthew Brandt A PLATFORM FOR EVERY PURPOSE Social media posts by museums are considered to be the most influential when buying art by a particular artist, with 64% of those surveyed considering these to be important/very important. This is followed closely by galleries at 60% and artists at 59%, suggesting that traditional influencers still have significant weight in the art market, even on social media. However, in the past if a collector was open about their collecting habits, access to such information would have been inherently delayed by the press, if published at all. Today, even private purchases may be broadcast in almost real-time to anyone following a collector who wishes to share this information. This is important, particularly for new art buyers, as 74% said they were influenced by posts from other art collectors. This suggests a greater opportunity to influence collecting habits in real-time than ever before. 74% said they were influenced by posts from other art collectors. This suggests a greater opportunity to influence collecting habits in real-time than ever before. We believe the use of social media to influence art market trends, map tastes and market art directly to buyers will continue to grow and evolve as more tastemakers in the art world register with a platform, and more users seek them out. Of those respondents who have been buyers for less than three years, social media s primary influence was on improving confidence. How it improves confidence fell into several key themes: More information on known artists Connection with artists (news/insights) Expert sentiment Discussion of artists/works Articles and opinion pieces or op-eds inform buying habits Discovery New ways of buying New artists New styles/tastes Popularity of trending artists Hashtags (how many and by whom) Active /trending Status of commentators Peer confirmation Opinions of friends Dictation of taste Typical budgets/price ranges Alexa ranking statistic [ retrieved from: ] 2 Instagram official statistics [ retrieved from: ] 3 Forrester report: Use Instagram Now [ retrieved from: ] 4 10 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

7 Detailed findings Detailed findings Based on the findings of the first Hiscox Online Art Trade Report in 2013, buying art solely based on a digital image has become a common and accepted way of buying art today, particularly at the lower price segment of the market. The majority of collectors and galleries at the time (71% and 88% respectively) said they bought and sold art regularly on the basis of a digital image (i.e. sight unseen). However, direct e-commerce was less common, with only 29% of the galleries offering their clients the possibility to buy art works directly through the website. Similar to last year, this report has been solely focused on direct e-commerce (clickand-buy) through different types of online art selling platforms and the aim this year has been to spot new trends in online art buying behaviour. Detailed findings Visitor trends BROWSING BEHAVIOUR For the last two years we have tracked new, existing and potential art buyers browsing patterns and online engagement, to be able to better understand how buyers are gradually changing the way they find, engage with and ultimately buy art online. What we re seeing this year is that browsing increasingly translates into online sales, with 63% of high frequency visitors also being online art buyers, up from 55% last year. There is a clear relationship between individuals who browse art buying platforms several times a week and their willingness to buy. It is also interesting to note that new art buyers are more likely to visit online art and collectible sales websites than seasoned buyers. This observation is particularly significant as it highlights the importance of online platforms as a destination and potential breeding ground for new collectors. There is a clear relationship between individuals who browse art buying platforms several times a week and their willingness to buy. Visitors are spending more time per visit, which could signal that they are becoming more selective about how they spend their time online. The majority (57%) of respondents said they spend more than ten minutes per visit browsing online art platforms, whilst 30% of respondents said they spend more than 20 minutes per visit, up from 28% in The average time spent per visitor will become a significant business driver for these websites in the future, as time spent on each site increasingly translates into sales. The key to success going forward will be how online art buying platforms keep their audiences engaged and build client loyalty and trust, a key challenge when the competition is only a click away. The Fate of Man Damien Hirst 12 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

8 Detailed findings Detailed findings Click-and-buy trends BUYING ART DIRECTLY THROUGH AN ONLINE ART PLATFORM The online art market is gathering pace, with 49% of respondents having bought art and collectibles directly online through a click-and-buy (or clickand-bid) website or app. This was significantly up from 38% last year. Among the buyers, 73% were over 30 years old (up from 72% last year), while 20 to 30-year-old buyers accounted for 27%. 51% of buyers are men, compared to 49% women, closing the gender gap from 2014, where 54% were men and 46% were women. Despite 51% of survey respondents not having bought art online, 21% of these intend to do so in the next 12 months. This will be an important group to target in the future if potential, but hesitant, buyers are to be converted into confident online consumers. Among those aged 35 and under, 19% said they preferred the online experience. The majority (65%) of people who bought art online, are repeat buyers. 45% of buyers have bought between two and five art works or collectibles in the last 12 months, 8% have bought between six and ten times and 12% have bought more than ten times (up from 8% last year). These figures indicate that existing online buyers are becoming more confident and that online art buying is increasingly becoming part of the way they acquire and collect art. Among online art buyers, 48% still prefer the physical spaces such galleries and auction houses, but this is down from 54% last year. At the same time, 15% say they prefer the online experience (up from 11% last year) and 37% said they had no preference for either. Among those aged 35 and under, 19% said they preferred the online experience. This suggests that art buyers, particularly younger art buyers, are becoming less dependent on the physical gallery or auction house as a destination to buy art and that there is an increasing level of indifference between the channels that collectors prefer using. A key to success going forward will be the ability to offer potential art buyers the choice to use different channels when they are looking to acquire art. With 91% of online buyers surveyed having bought from a physical gallery or auction house before buying online, brick-and-mortar space remains vital in educating and driving confidence in art buying. It follows that online art buying should be seen as a compliment to, rather than a replacement of, physical auctions, galleries and art fairs. However, it is also evident from the survey findings that the online art market is attracting, building confidence and cultivating an entirely new generation of art collectors. For His Own Good Abigail Lane It is interesting to note that among the online buyers aged below 35 years old, 15% had never bought from a physical gallery or auction before buying art online (versus 9% based on the overall sample). This percentage was even higher among new art buyers, where 20% said they had never bought art in a physical gallery or auction prior to making an online purchase. This signals that online platforms play an important role as an entry point for new buyers, particularly as buying art online is often perceived as less intimidating. In fact, 45% of respondents feel that the process of buying from an online art platform is less intimidating than buying from a physical gallery or auction house (up from 39% last year). However, it is important to put the above findings in the context of general trends in online consumption, as other markets are helping to break down barriers to buying art online. Among the survey respondents, 69% had purchased other consumer items online in a similar price range prior to their online art purchase (up from 58% last year). However, for 31% it was the first time they had ever spent this amount of money online. 49% of respondents are online buyers 65% who buy online are repeat buyers 48% of online buyers still prefer physical spaces 45% feel that buying online is less intimidating Online platforms play an important role as an entry point for new buyers, particularly as buying art online is often perceived as less intimidating. 45% are concerned about customer service 21% feel sense of loyalty to an online art platform 79% are buying from more than one online provider CUSTOMER LOYALTY IN THE ONLINE ART MARKET Although the majority of online art buyers are very happy with their buying experience, there are clear issues that need to be addressed surrounding fulfillment and buyer education. One area that needs specific attention is insurance, as 63% said they were not very satisfied or only moderately satisfied when it comes to clarity around whether the object is insured whilst in transit. Linked to this are concerns around shipping, with 43% expressing a moderate or low level of satisfaction with these services. Many of these issues could be addressed through improved customer education and information, as well as better customer service. A significant number of online art buyers (45%) expressed concerns with customer service when buying art online and 47% felt that the website lacked sufficient information. It is evident that efficient purchase fulfillment will be an important ingredient in creating loyalty among customers. Creating that loyalty will be a challenge for many of the online art sales platforms. However, creating that loyalty will be a challenge for many of the online art platforms. Only a minority of online art buyers (21%) said they felt a sense of loyalty to the platforms they bought from, compared to 37% who said they rarely or never felt a sense of loyalty. This will become an important aspect in the future dynamics of the online art market, given the competition is only a click away. The competitive nature of the online art market is evident, as 79% of online buyers are buying from more than one provider. Among online art buyers, 57% said they had bought from two or three different online sales platforms, with a further 22% buying from more than three different online sales platform. Just 21% had bought from one platform only. BUYING MOTIVATIONS INVESTMENT RETURN IS IMPORTANT The emotional benefits of buying art remain the dominant motivation for purchase among collectors, however 63% said they are also motivated by value potential or return on investment when buying art online. Investment motivation is even higher among new art buyers. Investment motivation is even higher among new buyers, with 75% saying they were driven by the value potential when buying art online. This suggests that new buyers are much more driven by economic factors than social trends or status. It also indicates a strong trading mentality and the potential for online art marketplaces to succeed as pure transactional platforms. 93% motivated by emotional benefits of buying art 75% of new buyers driven by value potential Montana Lee Friedlander 14 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

9 Section title goes here Detailed findings What are people buying? PAINTINGS The most popular medium online remains paintings, with more purchases in the low and middle-market: 62% of online art buyers said they had bought paintings online in the last 12 months (up from 57% last year). 30% of these paintings were bought with average prices below 1,000 (compared to 25% last year), followed by 29% who bought paintings in the 1,000 to 5,000 price range (compared to 35% last year). However, the 5,000 to 10,000 segment accounts for 18% of the buyers, up from 10% last year and signaling that the market is gaining confidence in buying at higher price points. At the same time we have seen a smaller number (5%) of buyers in the 50,000 and above category, down from 10% last year, which could signal that the online art market is finding a natural price spectrum in which to operate. SCULPTURE Sculpture caters for buyers at the higher end of the price spectrum: 22% of online art buyers had bought a sculpture online in the last 12 months (up from 21%). 31% of these buyers paid on average between 100 and 1,000 per art work, whilst 62% paid between 1,000 and 10,000 and 6% between 10,000 and 50,000. PHOTOGRAPHY Photography remains the third most popular category: 35% of online art buyers had bought one or more photographs online in the last 12 months (down from 43% last year). 40% of these buyers spent less than 500 per photograph, whilst 13% spent between 500 and 1,000. A significant 31% bought photographs in the 1,000 to 10,000 range, with 15% having spent more than 10,000 on a single work (up from 10% last year). DRAWINGS Drawings are increasing in popularity among online buyers: 31% have purchased one or more drawings online in the last 12 months (up from 19% last year). 46% of these buyers had bought drawings below 500, 15% between 500 and 1,000, 28% between 1,000 and 5,000 and 13% above 5,000. Of these buyers, 47% had bought once, whilst 42% had purchased between two and five times, and 11% had bought more than five times in the last 12 months. PRINTS Limited-edition prints remain the second most popular medium in the online art market, but this is largely driven by the lower end of the market: 53% of online art buyers said they had bought a print in the last 12 months (up from 51% last year). In terms of price points, 58% bought limited-edition prints for less than 500 (up from 44% last year) and among 20 to 30-year-olds, 84% had bought a print online for 500 and below. For price segments above 500, we have seen a smaller proportion of overall buyers, signaling that these buyers are migrating to other mediums as confidence in buying art online grows. NEW MEDIA New media and digital art is still in its infancy but likely to increase in appeal for younger buyers: 10% of online buyers have bought new media and digital art online (the same as last year), with 46% spending on average less than 100 per purchase. These lowend purchases are likely to be driven by websites such as [S]-edition, which sells limited-edition digital works for as little as 5. However, among buyers of new media art, 23% paid between 1,000 and 5,000, which suggest that there is some confidence in buying new media art at higher price points. Maid s Day Off Cecily Brown 16 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

10 Detailed findings Detailed findings Why buy art online? ONLINE ART SPENDING PATTERNS Online art spending is gathering pace, with the online art market reaching an estimated $2.67 billion last year. 46% of the online art buyers surveyed had spent 10,000 or more so far on buying art online (up from 44% last year). Among these, 19% have spent between 10,000 and 25,000 and 11% said they had spent between 25,000 and 50,000. Only 16% said they had spent in excess of 50,000. We are also seeing evidence that online art buyers are actively cross-collecting and buying other collectibles online. 34% of buyers had also bought decorative art and design online, and when looking just at those aged 35 and under, this figure rises to 55%. Other popular categories were antiques (22%), wine (19%) and jewellery (19%), and again looking just at buyers aged 35 and under, these figures rise to 37% for antiques, 34% for jewellery and 24% for wine. 67% of online art buyers had bought more than one fine art object in the last 12 months. Among online art buyers, 41% said their average price paid per piece was less than 1,000 (up from 37% last year), 26% said the average price was between 1,000 and 5,000, 17% between 5,000 and 10,000 and 16% above 10,000. Among new art buyers the majority (54%) said the average price per purchase was less than 1,000, 28% said it was between 1,000 and 5,000, 8% between 5,000 and 10,000 and 10% said the average price per piece was above 10,000. The majority (67%) of online art buyers had bought more than one object in the last 12 months, 49% said they had purchased between two and five art works, 11% said they had purchased between six and 10, and 7% had purchased more than ten artworks online. WHAT ARE THE ADVANTAGES OF BUYING ART ONLINE? 80% said that the primary advantage was the ability to easily search for art and collectibles (up from 74% last year). 71% said that the discovery of new art and artists was the key advantage of buying art online. The internet is breaking down geographical barriers, making it possible for artists to find fans and collectors with unprecedented scale and efficiency. 67% of online art buyers said that the convenience of buying and bidding on art online is one of the key advantages. This was even more attractive to younger buyers (those aged 35 and below), where 78% said this was a very important aspect of buying art online. It is clear that the need for a one-stop shop for art discovery and buying is becoming increasingly attractive to new, and younger, buyers. 66% of respondents said that an advantage of online art platforms is the range and diversity of art and collectibles on offer (up from 65% last year). 80% Searchability 46% of online art buyers said that affordability played an important part in buying art online, as they felt online art platforms offered works at all price segments. In fact, as many as 56% of online art buyers aged 35 and under said that having the possibility to buy more affordable works was important to them. 45% said it was less intimidating to buy art online. The art world is often perceived as exclusive and inaccessible to new buyers, and 45% of respondents said they feel the process of buying from an online art platform is less intimidating than buying from a physical gallery or auction house. Again, this aspect of the online purchase experience was significantly stronger among new and younger buyers, with 63% of buyers below the age of 35 saying this was an important reason to them to buy art online. 45% Less intimidating 71% Discovering new art and artists 67% Convenience 46% Affordability 66% Range and diversity of art Mural of Alfred Eisenstaedt s photo VJ Day, The Kiss Eduardo Kobra 18 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

11 Responding to the challenges Responding to the challenges Responding to the challenges Although people are already buying art online and are largely satisfied with the process of doing so, there is still a set of desired products and services that could facilitate more buying activity, and at higher price points. What are the disadvantages of buying art online? PHYSICAL INSPECTION Challenge: 82% of online art buyers (up from 78% last year) say the biggest challenge when buying art online is the fact they are not able to inspect the physical work. In a similar vein, those worried that the artwork may appear different from its representation online has risen from 64% to 74% year on year. Remedy: better information and compulsory condition reports carried out by an expert could reduce the fear. Challenges regarding the reality of a piece versus its online appearance suggest the need for 3D image-rotation and ultra highresolution zoom features for all art listed online. As a consequence of not being able to physically inspect the work when buying art online, there is a fear that the artwork turns out to be very different from what the buyer expected. Can the object be returned? Although in theory this might seem like a trivial service to offer, the practicalities and costs associated with returning art are quite different. However, a returnguarantee will be important as the online art market develops, with 74% of respondents already indicating a 30-day return guarantee was a significant factor in their decision to buy. AUTHENTICITY Challenge: 66% of online art buyers (up from 58% last year) said they were afraid of buying a fake or an object that was not what it set out to be. As evidenced by the growing number of anti-forgery operations, the globalisation of the online art market presents an increased opportunity for criminals, with legitimacy and authenticity critical to buyer confidence. Remedy: 80% of respondents this year said that authentication certificates must become standard practice for art and collectibles sold online. However, Certificates of Authenticity (COAs) have equally been a target of much controversy due to online auction sites where sellers are providing fake COAs to market or sell their art works. Certificates must originate from (and should be signed by) either the artist responsible for the work, the publisher of the art (in the case of limited editions), a confirmed and established dealer or agent of the artist (not a casual third party or reseller), or an acknowledged expert on the artist. Without one of these, a certificate is effectively worthless. There is a greater need for standardisation in this field to ensure that buyers understand what a COA is and is not. REPUTATION AND TRUST Challenge: 57% of online art buyers said the biggest challenge when buying art online was linked to trust. The importance placed on the seller s reputation remains significant, and presents a challenge for new players, but an opportunity for existing operators. However, building trust in an online environment is not the same as in the physical world. The biggest challenge when buying art online is linked to trust. Remedy: 49% of current buyers said that other online buyers reviews and feedback would serve as a means of creating more trust and confidence in the online art buying process. The introduction of a reputation-based rating system for both online sellers and buyers as a way of signaling efficiency, client support, commitment and honesty, is clearly a service that would be welcomed by current and potential online buyers. Nasty Mel Brochner 20 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

12 Responding to the challenges Responding to the challenges INFORMATION Challenge: 57% of online art buyers said their main worry was the lack of information regarding the object, both with regards to its quality and provenance. A further 64% of online art buyers said it was very important to have more information regarding the artist and 61% wanted to have more market information regarding historic prices. Remedy: in a market where pricing and valuation is often seen more as an art than a science, historic price records could give the buyer confidence that they are paying the current fair value. At the same time, it allows buyers to follow price trends for similar objects sold in the past. 58% of potential buyers (and 50% of current buyers) said that having access to an independent valuation report would increase their confidence in buying art online. As the online art and collectibles market grows, the demand for independent valuations is likely to increase significantly. In the absence of physical contact with a seller who would normally communicate the background of the artist and meaning of the work, thus helping to educate the buyer this role will need to be replaced by better and more accessible information related to each artwork and artist. One potential solution to this would be the option of talking to a relevant expert about a work of art or collectible object listed online, demand for which currently stands at 60%, and is particularly indicative of young buyers appreciation of the benefits art expertise brings to decision-making. LOGISTICS Challenge: 43% of online art buyers (up from 37% last year) are concerned about the logistical aspect of the online transaction, including packing and methods of shipment. Remedy: 71% of respondents said they wanted more information about shipping and packing, in order to feel more confident about buying art online. There is definitely more knowledge and information required to educate both sellers and buyers with regards to logistical issues such as storage, shipping and adequately packing the object to protect it from damage. There will be an important role for the insurance industry to play here, to enforce certain standards as the online art trade grows. INSURANCE Challenge: 73% of online art buyers are placing increased importance on having in place appropriate insurance cover when buying art online (up from 67% last year). There is very little knowledge and understanding among online art buyers of what insurance events are covered or not covered in the event of a loss or damage. Remedy: although most shippers would insure work in transit, there is an opportunity for the insurance industry to educate online art buyers about the benefits of specialist art insurance cover. This could provide the art insurance industry with an opportunity to expand their services and build client relations with a new generation of buyers and collectors. REPAYMENT PLANS Challenge: as art buyers are getting more confident in buying art at higher price segments (between 5,000 and 25,000) the need for financing options has become more evident. 46% of buyers in this price segment said that a finance option would be important or very important in terms of their future confidence in buying art online. 52% of buyers who had been collecting for less than three years said that having a finance option would make them feel more confident in buying art online. As art buyers are increasingly getting more confident in buying art at higher price segments, the need for financing options has become more evident. Remedy: it is evident that the upfront amount required to buy art is a major challenge to new buyers and schemes such as Own Art an Arts Council of England initiative offering interest-free loans already integrated into the services of some online sales platforms, could play an important role in bringing new buyers into the online art market going forward. Poisoned Page Mat Collishaw 22 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

13 Raw findings Raw findings Raw findings Social media What would you estimate is your daily social media usage? less than three years) Don't use social media 9% 1% 6% One hour or less 39% 30% 29% One to three hours 40% 51% 57% Three to eight hours 9% 13% 6% Eight to 12 hours 2% 3% 0% 12 hours or more 1% 0% 2% Which social media platform do you use most for-art related purposes? (often/always) less than three years) Instagram 34% 48% 69% Tumblr 5% 7% 12% Facebook 52% 61% 80% ArtStack 9% 11% 20% Twitter 26% 30% 49% Pinterest 11% 11% 20% LinkedIn 27% 30% 37% Flickr 3% 2% 2% Are you influenced by social media activity when buying art? less than three years) Yes 24% 27% 39% No 47% 34% 35% Don t know 30% 39% 27% How do you find out about these online art sales websites? (you can choose more than one option) less than three years) 2014 Word-of-mouth (friends, colleagues and other art buyers) 54% 65% 62% 35% Google Search (or other search engines) 43% 41% 48% 43% Social media (Facebook, Twitter, Instagram, etc.) 41% 53% 54% 34% Art fairs (through online apps launched in conjunction with a traditional art fairs) 35% 37% 38% 35% Auctions (through auction house websites) 35% 28% 34% 48% Galleries (galleries advertising their presence/ links on online sales platforms) 33% 29% 29% 53% Media articles (newspaper, specialist art magazines, etc.) 56% 58% 58% 59% Motivations and online art buying patterns How important are the following motivations when buying art and collectibles? (respondents answering important/very important) less than three years) Emotional benefits (passion for art) 93% 95% 95% Social aspect (being part of a scene of like-minded people) 35% 41% 43% Value potential (return on investment) 63% 65% 75% Identity and status (it defines who I am) 39% 47% 54% Have you bought art and/or collectibles directly online through a click-and-buy or click-and-bid website (with or without having seen the physical object)? less than three years) 2014 Yes 49% 46% 43% 38% No 51% 54% 57% 62% Browsing behaviour How often do you visit online art and collectible sales websites where you can buy directly through click-and-buy? less than three years) 2014 Never 10% 9% 0% 10% Once a year 11% 13% 6% 9% Once a month 35% 34% 43% 32% Once a week 21% 19% 18% 23% A few times a week 23% 24% 32% 27% On average how much time do you spend on these online art sales websites per visit? less than three years) 2014 Five minutes or less 18% 14% 11% 13% Five to ten minutes 25% 28% 31% 29% Ten to 20 minutes 27% 29% 28% 30% 20 to 30 minutes 15% 15% 11% 15% 30 minutes or more 15% 14% 20% 13% How many times have you bought an art or collectible object online in the last 12 months? less than three years) 2014 Once 35% 35% 41% 36% Two to five times 45% 49% 44% 47% Six to ten times 8% 8% 7% 7% Ten times or more 12% 9% 7% 10% Had you purchased works from a physical gallery space, auction or art fair before purchasing an art work/collectible online? less than three years) 2014 Yes 91% 85% 80% 90% No 9% 15% 20% 10% Which experience did you prefer? less than three years) 2014 Physical space 48% 48% 50% 54% Online 15% 19% 15% 11% No preference 37% 34% 35% 37% 24 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

14 Raw findings Raw findings Which device do you mostly use when buying art online? less than three years) 2014 Tablet 21% 21% 24% 25% Desktop 68% 70% 73% 71% Mobile 11% 9% 3% 4% How satisfied were you with the following aspect of your online art purchase? (very satisfied/extremely satisfied) less than three years) Search (finding the art work with ease) 66% 70% 69% Information (sufficient information provided on the art work to make a decision) 53% 57% 52% Payment (invoicing, security, ease of payment, etc.) 68% 69% 78% Shipping (timely, arrive in good condition, etc.) 57% 52% 57% Insurance (clarity about whether the art work is insured against damage or theft whilst in transit) 37% 39% 43% Customer service (responding to questions, assisting with the purchase or other issues) 54% 60% 54% Do you feel loyal towards the online art sales companies that you have bought from? less than three years) Never 17% 14% 17% Rarely 20% 24% 15% Sometimes 41% 44% 48% Very often 17% 14% 13% Always 4% 5% 7% What attributes would you say are critical when deciding on which online art sales website to potentially buy from? less than three years) Quality of the art on offer is the art as good as the art I can buy offline? 93% 91% 91% Price transparency: clear pricing and the possibility to check past and current prices 88% 91% 85% Search/navigation: easy to find art and artists that I am interested in 88% 94% 91% Information about the art: background information about the artist and the work Reputation of the online sellers of art (galleries or dealers that I already know or have heard of) 82% 87% 85% 82% 74% 78% Freshness: always new and interesting art available for sale 58% 57% 63% Artist brands: selling well-known artists 50% 46% 54% Additional content: Interesting articles, commentaries and news on the website 43% 44% 48% Customer reviews: ability to read other people s views and feedback 42% 57% 53% What are the advantages of buying art online? Search: I find it easier to find (browse) artworks that I like Discovery: I can find artists and artworks that I otherwise would never come across Buy/bid: I find it more convenient to buy or bid on art online Range on offer: online galleries and auction houses provide a larger selection of artworks across different mediums and price brackets Affordability: I find that art works sold online are generally more affordable Experience: I find the process less intimidating than buying from a gallery and auction house What are the disadvantages of buying art online? Condition: I am not able to inspect the work and therefore worried about the physical condition Physical inspection: I am worried that the work will look different in real life compared to the digital image Authenticity: I am afraid of buying a fake or an object that is not what it sets out to be Reputation of the seller: I don't trust buying from sources I don't already know Quality and provenance: there is not enough information provided about the quality and provenance of the object Returns policy: I am worried that I might not like the art work/object, and if so, whether I am able to return it less than three years) % 86% 83% 73% 71% 72% 69% 74% 67% 78% 72% 61% 66% 70% 63% 62% 46% 56% 54% 43% 45% 63% 59% 38% Under 35 years old New buyers (collecting less than three years) 2014 Non-buyers % 81% 83% 78% 77% 74% 82% 83% 64% 84% 66% 71% 76% 58% 58% 57% 56% 52% 58% 58% 57% 58% 61% 51% 61% 47% 53% 54% 47% 58% Shipping: I am worried about the packaging and method of shipment 43% 51% 52% 37% 38% Insurance: I am concerned that if the work is damaged in storage or transit will this be covered by insurance Online payments: I am uncomfortable paying larger sums of money online Which of the following services would make you more confident in buying art and collectibles online? 39% 43% 46% 38% 40% 29% 35% 33% 29% 34% Under 35 years old New buyers (collecting less than three years) 2014 Non-buyers 2015 Potential buyers 2015 Condition report 88% 89% 91% 94% 91% 87% Certificate of authenticity 80% 87% 91% 83% 81% 83% 30-day return guarantee 74% 76% 76% 77% 75% 73% Include the option to insure the object when buying it 73% 77% 72% 68% 74% 67% More information about the shipping and packing of the object 71% 72% 74% 61% 72% 61% More background information about the artist/object 64% 72% 70% 77% 64% 77% Comparable transactions more information about the past sales of the object/artists 61% 72% 70% 69% 62% 66% Option to talk to an expert or specialist 60% 70% 74% 67% 61% 65% Independent valuation report 50% 61% 61% 60% 51% 59% Customer reviews/feedback from previous buyers 49% 58% 59% 63% 50% 63% Repayment plan (interest-free) 39% 49% 52% 44% 41% 46% 26 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

15 Raw findings Average price and purchase frequency What is the average price per object bought online? 100 and less 101 to to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 25,000 25,001 to 50,000 50,001 and above Fine art 7% 18% 16% 26% 17% 9% 3% 4% Decorative art and design 20% 27% 14% 27% 7% 2% 2% 2% Jewellery 26% 18% 24% 9% 21% 3% 0% 0% Watches 14% 9% 14% 36% 18% 5% 5% 0% Wine 50% 36% 11% 0% 4% 0% 0% 0% Antiques 22% 25% 19% 9% 16% 9% 0% 0% Stamps and coins 30% 30% 10% 20% 10% 0% 0% 0% Memorabilia 47% 24% 6% 6% 12% 0% 0% 6% How many items did you buy online in the last 12 months? One Two to five Six to ten 11 to and more Fine art 33% 49% 11% 5% 2% Decorative art and design 29% 53% 13% 5% 0% Jewellery 41% 53% 6% 0% 0% Watches 56% 39% 6% 0% 0% Wine 7% 52% 26% 4% 11% Antiques 45% 39% 10% 3% 3% Stamps and coins 11% 56% 11% 22% 0% Memorabilia 25% 63% 6% 0% 6% Methodology The survey findings are based on responses from 519 art buyers surveyed through ArtTactic s client mailing list, Twitter and Facebook and Own Art s ( mailing list. Most of the survey respondents from last year participated in this year s survey as well, however the sample has been broadened by particularly focusing on the new art buyers. This has allowed us to get a better idea of current online buying trends and behaviour among this next generation of buyers, and to better understand their concerns and future expectations with regards to buying art online. Although the central focus is around fine art, we have in this survey also explored online buyers buying habits of other collectibles. Structure of ArtTactic s 519 respondents GENDER GEOGRAPHY Methodology Sacred Heart Damien Hirst If you have bought fine art directly online, what type of medium have you bought? Paintings 55% 69% Prints 52% 59% Drawings 21% 35% Photographs 40% 39% Sculpture 21% 24% New media art (video/digital) 12% 12% 44% Male Female 56% Europe 57% North America 26% Latin America 3% Asia 10% What is the average price per object bought online? 100 and less 101 to to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 25,000 25,001 to 50,000 50,001 and above Middle-East 3% Africa 1% Paintings 5% 13% 12% 29% 18% 13% 5% 5% Prints 27% 31% 17% 19% 3% 1% 1% 0% Drawings 23% 23% 15% 28% 5% 5% 3% 0% AGE Photographs 18% 22% 13% 31% 13% 2% 0% 0% Sculpture 14% 14% 3% 31% 31% 3% 3% 0% New media art (video/digital) 46% 8% 15% 23% 0% 0% 8% 0% 11% 22% 16% 12% 10% 7% 9% 5% 4% 4% How many items did you buy online in the last 12 months? One Two to five Six to ten and more Paintings 47% 44% 7% 1% 1% Prints 34% 50% 9% 3% 3% Drawings 49% 41% 8% 3% 0% Photographs 54% 46% 0% 0% 0% Sculpture 61% 29% 11% 0% 0% New media art (video/digital) 42% 33% 17% 0% 8% The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

16 Company profiles Company profiles Company profiles 1STDIBS ART.COM ARTNET ARTSPACE Founded: 2001 Founded: 1998 Founded: 1989 Founded: 2011 New York United States Berlin New York Michael Bruno Joshua Chodniewicz and Michael Heinstein Jacob Pabst Catherine Levene and Christopher Vroom David Rosenblatt (CEO) Geoffrey Martin (CEO and Director) Hans Neuendorf Catherine Levene (CEO) and Index Ventures, Spark Capital, Benchmark Stripes Group, Polaris Partners, Southern John Huson, Hans Neuendorf and Piroschka Emmanuèle Vinciguerra (COO) Capital and Alibaba Group Capitol Ventures, Benchmark and Dossi Online marketplace and e-commerce Online Marketplace Saints Capital Online auction Online retailer of posters, prints, and Artspace is a leading online marketplace for contemporary art and ideas, 1stdibs is a global marketplace for rare and desirable objects. framed art products in the United States Online since 1995, artnet is a leading resource for the international offering both established and aspiring collectors the opportunity to The website brings together more than 2,000 professional dealers and internationally art market, and the principal platform for art auctions on the internet. discover, learn about and purchase meaningful contemporary art at the from around the world specialising in design, fine art and collectibles, Offering a wide range of art market resources, artnet provides a place for click of a button. Partnering with leading artists, galleries, museums and and serves as a source for collectors, affluent consumers and Art.com offers wall art products, such as posters, art prints, tapestries, people to buy, sell and research fine art, design and decorative art. cultural institutions worldwide to curate the finest selection of art for sale interior designers. photography, wall signs, limited editions, hand-painted originals, and exclusive products; and other wall decor products. The company also ARTPLODE online, it provides detailed and transparent information on every artist and artwork. In addition, Artspace Magazine brings customers closer to 1stdibs GMV in 2014 was $1.1 billion, a 20% increase over the previous provides a range of finishing services, including custom framing, wood the art world through in-depth interviews, analysis and features making year, and online sales increased 108% year-on-year. There are over two mounting and canvas transfers. In addition, it provides Artist Rising, Founded: 2014 sense of the most pressing issues around the globe. Artspace believes million visitors per month and 1.2 million site registrants. an online community of independent and emerging artists; Zenfolio, London that art and artists play a fundamental role in our society, which is why 500PX a solution for photographers to organise, display, and sell their work online; and Photographer Central, an online directory of professional Maureen McCarthy Online direct-to-consumer purchase platform every work of art for sale supports either artists directly or non-profit organisations devoted to art, culture or charitable causes. Founded: 2008 photographers available for hire. Art.com Inc. was formerly known as wall.com, Inc. and changed its name to Art.com Inc. in Artplode provides an online forum where sellers and buyers can connect ARTSPER Toronto Andy Yang ARTFINDER directly with all transactions completed without any commission charged to either party only a one-off flat fee is paid by the seller to list their Founded: 2013 Evgeny Tchebotarev and Oleg Gutsol work. This means better deals for buyers, and sellers receiving 100% of Paris Andy Yang (CEO) and Oleg Gutsol (CPO) Founded: 2010 the proceeds of the sale of their artworks. Hugo Mulliez and François-Xavier Trancart High Line Venture Partners, Deep Creek Capital, ff Venture Capital, CAA Ventures, London Jonas Almgren ARTSLANT Steve Rosemblum, Severine Boutry, Philippe Charpentier and Alexandre Mulliez Dustin Plett, Rugged Ventures, Harrison Metal Greylock, Wellington, Northzone, Sherry Coutu, Online gallery, click-to-buy and Andreessen Horowitz and others Founded: 2006 Digital media IP licensing and sales, and online Online marketplace for art Los Angeles (main office) Artsper offers works of fine art across ten sub-categories, with the gallery e-commerce Georgia Fee and Catherine Ruggles majority of works being either paintings or photography. Prices range Artfinder s marketplace for art enables art lovers to discover and buy Catherine Ruggles (CEO), Sara Armstrong from less than 500 to over 25,000. As of January 2015, there are 500px is a photo community for discovering, sharing, buying and selling affordable original art directly from independent artists and galleries. (CTO), Joel Kuennen (COO), Sunny Tyrrell (VP 4,580 works, 192 galleries and 1,426 artists listed on the website. inspiring photography powered by creative people worldwide. Artfinder does not sell print-on-demand reproductions or posters. Advertising) and Frances Guerin (European Operations Officer) ARTSTACK 500px has raised $9.3 million in venture capital to date. Their seed The Artfinder marketplace has 100,000 artworks for sale, from 5,000 News media, online gallery and e-commerce round saw $525,000 raised in 2011, followed by $8.8 million in Series A artists in 80 countries. The marketplace adds more than 2,500 artworks Founded: 2011 funding in and 300 artists every week. Despite adding new artists quickly, the Artslant is a digital platform offering news, exhibition, gallery, artist and London AMAZON ART marketplace is growing so fast that artists on average sell 75% more today than they did a year ago. event information globally. Artslant also offers original works of art for sale via its e-commerce shop. Ezra Konvitz, James Lindon and Alex Gezelius Ezra Konvitz (CEO) (search for fine art ) Established: August 2013 ARTFUL Social media platform and online gallery Seattle ArtStack is a digital platform for mobile and web, allowing users Online gallery, e-commerce platform Rachel Hotchkiss to discover, share and rate artworks, and to learn about artists Rachel Hotchkiss and Joshua Blackburn and exhibitions. Online store that offers more than 60,000 works, according to Amazon, Rachel Hotchkiss and Joshua Blackburn from over 4,500 artists supplied by more than 150 galleries and dealers. Affordable online art marketplace ArtStack has over 650,000 artworks uploaded, approximately 120,000 It operates in all ends of the market through a selection of affordable art (under 5,000) artists and 35,000 exhibitions referenced. as well as paintings in the multi-million dollar range. Artful s stated goal is to: inspire a new culture of art buying; where exceptional is affordable, everybody is welcome, artists are championed and customers find art they love. 30 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

17 Company profiles Company profiles ARTSY ARTUSIAST AUCTIONATA BARNEBYS.CO.UK Founded: 2009 Founded: 2013 Founded: 2012 Founded: 2011 (Sweden) and 2013 (UK) New York Berlin (headquarters) Berlin (with offices in London, Zurich Stockholm, Sweden and London Carter Cleveland Timo Niemeyer (MD) and New York) Christopher Barnekow (CEO), Carter Cleveland (CEO) and Alice and Kilian Jay von Seldeneck, Georg Untersalmberger and Alexander Zacke Pontus Silfverstolpe, Gustaf Grapengiesser Sebastian Cwilich (President and COO) Karl Philip Prinzhorn, Christian Boros Alexander Zacke (CEO), Jan Thiel (COO), and Christofer Ferreira Gomes Dasha Zhukova, founder of Moscow s Garage Timo Niemeyer, Stefanie Sava, Georg Untersalmberger (CTO), Industrifonden, Active Venture Partners, Center for Contemporary Culture; Jakob Ballestrem, Cristina Crivelli Christof Schminke (CMO) Monkfish, Howzat and STING Wendi Murdoch, film producer; Peter Thiel, Karl & Faber, Christophe Marie (twice named and Susanne Zacke (CSO) Traffic aggregator and cost-per-click founder of Paypal, board of Facebook; Europe s top seed investor) Earlybird, HV Holtzbrinck Ventures, e.ventures, Sky Dayton, founder of Earthlink and Boingo Online shop for original art, interviews with art Kite Ventures, TA Venture, Bright Capital, Barnebys is an online auction listing aggregator and sales database, Wireless; Josh Kushner, managing partner of collectors, cutting-edge exhibitions, advice on the Raffay Group and REN Invest aiming to increase traffic (i.e. new bidders) to its affiliated websites. This Thrive Capital; Jack Dorsey, creator of Twitter; art Weekly live internet auctions plus curated also means that users are for the first time able to search the whole and Dave Morin, co-founder and CEO at Path online shop with more than 10,000 objects of the auctions market in one user-friendly site. Barnebys offers a free- Inquire to buy and online auctions Artusiast is a curated marketplace for art, co-operating with global to-use database of realised prices, dating back to the beginning of the auction houses, art traders and galleries to offer original art from famous Auctionata is an online art destination where people can experience 1980s and providing over ten million sold lots. Artsy is an online art resource for learning about specific artists and artworks and/or collecting art, with a dual mission to expand artists at affordable prices. Their online shop features various categories from contemporary art to old masters. exciting selling and buying moments in the arts, antiques and collectibles market. It allows people to submit their bids live and directly to the online BIDSQUARE both education and commerce. It provides one place to browse artwork listings from leading galleries and international art fairs, museum collections, current gallery and museum exhibitions in cities ARTVIATIC auction room. AUCTION NETWORK SWEDEN AB Founded: 2014 Chicago around the world, and covers major art world events. It is powered Founded: Leslie Hindeman, David Rago, Wes Cowan, by cutting-edge technology including The Art Genome Project, a Monaco Founded: 2011 Ronald Pook, Andrew Brunk, David Rago and classification system that maps the connections between artists Antoine Van de Beuque Stockholm and Berlin Karen Keane and artworks. Artsy provides free access via its website and iphone Antoine Van de Beuque (CEO) Niklas Söderholm, Tom Österman, Online auction aggregator app to 250,000 images of art and architecture by 40,000 artists, Peer-to-peer Albert Ramstedt and Mark Westphal which spans historical to modern and contemporary works and Niklas Söderholm (CEO), Albert Ramstedt Bidsquare is an online bidding platform founded by Brunk Auctions, includes the world s largest online database of contemporary art. Online private brokerage platform, peer-to-peer business that connects (CTO), Veronica Sandman (CFO) and Cowan s Auctions, Leslie Hindman Auctioneers, Pook & Pook, Rago ARTUNER sellers to buyers to ease the way people transact art. They operate exclusively in the high end of the art market and focus on impressionist, modern and contemporary paintings, sculptures and works on paper Mark Westphal (MM) Management Marketplace for auction houses and Skinner, Inc. BUKOWSKIS Founded: 2013 above 150,000. The service they offer is only available for members, and London who can enjoy a three per cent commission fee on each purchase or Auction Network helps auction houses transform their business from the Eugenio Re Rebaudengo sale after paying a monthly or yearly subscription fee. traditional hammered model to online. Founded: 1870, (internet auctions founded in 2010) Online platform with physical pop-up projects ASTAGURU THE AUCTION ROOM Stockholm, Norrköping, Malmö, Göteborg and Helsinki ARTUNER offers guidance and expertise for collectors whilst giving Henryk Bukowski artists a critical context and professional environment in which to Founded: 2008 Founded: 2013 Anna-Karin Laurell (CEO) showcase their work. ARTUNER mounts exhibitions in collaboration Kolkata London 100% owned by the Lundin family with well-regarded institutions and curators in both online and offline Vickram Sethi George Bailey and Lucinda Blythe Traditional auctions and online auctions settings. Physical exhibitions are complemented by an online component Vickram Sethi (Chairman) and Online auction house that widens the collector base while offering an outlet to promote and Tushar Sethi (Director) Bukowskis has conducted auctions in Sweden for the past 140 years showcase artworks, articles, interviews and curatorial texts related to Online auction The Auction Room is an online auction site that offers its clients and is one of the oldest salesrooms for fine art in Scandinavia. the exhibition. AstaGuru is an online auction house with an aim to connect people the advantage of technology through excellent photography and presentation. It operates effectively in the low to middle range of CHRISTIE S from all over the world to the Indian marketplace. the market and benefits from specialist sales with a guarantee of authenticity. One of its main competitive advantages is the speed of sales from consignments to pay-out to the seller. Founded: 2006 Worldwide Brick and clicks Christie s online presence is a convenient way to bid in Christie s auctions worldwide. It allows users to see and hear the auctioneer in real-time, offering a unique online experience throughout the bidding process. 32 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

18 Company profiles Company profiles CULTURELABEL EBAY FINE ART BOURSE (FAB) HIHEY.COM Founded: 2009 Founded: 1995 Founded: 2014 Founded: 2011 UK Global London Beijing Peter Tullin, Simon Cronshaw and Online auction and click-to-buy Founder and Tim Goodman He Bin Florian Wupperfeld Online auction He Bin (CEO) Peter Tullin and Simon Cronshaw ebay is an early innovator of direct to consumer online trading via Shenzhen Capital Group and CITIC Securities EC1 Capital, Anil Hansjee, Anton Wellenreiter, auctions. ebay has increasingly moved to a click-to-buy transaction FAB is focused on significantly lowering fees for fine art auctions through Online auction and click-to-buy Julian Carter, Kevin Chong, Firestartr, Nathan model due to user demand. reducing showroom costs via reputable partners, reducing auction Elstub and Native (Journal of the Digital R&D overheads by hosting auctions online, and reducing both fee s and tax HIHEY.COM is an online art sales and service platform offering Fund for the Arts) Live auctions are a highly engaging format. To date, each ebay live exposure for clients by up to 90%. It does this by utilising an auction exhibitions, auctions and art financing to artists, individual and Online gallery and e-commerce platform auction buyer has already purchased on average close to four items system whereby the winning bid is always received and registered online corporate collectors, galleries and financial institutions. CultureLabel is a curated e-commerce platform that allows art lovers from the new platform. Collectibles accounted for nearly $8 billion of GMV in 2014 with despite a physical presence of bidders. Additionally, FAB has generated a substantial network of both suppliers and bidders by way of CEO INVALUABLE to explore art and design-led products hand-picked from influential more than 36 million active buyers. Tim Goodman s own contacts and reputation. museums, galleries, creative boutiques and direct from artists. They count over 650 partner organisations and feature over 20,000 Each day on ebay, more than 3,500 auctions close with a price of more than $5,000. HEFFEL.COM Founded: 1989 Boston products on-site. ebay has 155 million global active buyers in 190 countries. Steven Abt (Artfact LLC, now Invaluable) DEGREEART 50% of ebay volume is touched by mobile. ebay enabled $28 billion in mobile commerce in Founded: 1999 Canada Rob Weisberg (CEO) Insight Venture Partners, Commonwealth Founded: 2003 EPAILIVE David Heffel and Robert Heffel David Heffel (President) and Capital Ventures and Ascent Venture Partners Online auction marketplace London Robert Heffel (Vice President and Secretary) Isobel Beauchamp and Elinor Olisa Founded: 2011 Online auction Invaluable is one of the world s leading online auction marketplaces of Isobel Beauchamp (Director), Elinor Olisa Beijing fine and decorative arts, antiques and collectibles, featuring a live online (Director), Mike McGonigle (Chairman), Dr Qiqi Jiang Heffel Fine Art Auction House, a division of Heffel Gallery Limited, was bidding platform that allows collectors and dealers to bid in real-time Christopher A Holder (Director), and Live auction e-commerce platform established in 1995, and with its inaugural auction became the first in auctions held around the world. As a leading developer of SaaS Robert McCLatchey (Director) western Canadian fine art auction to achieve over $1 million in sales. and other e-commerce applications for the auction industry, Invaluable Market-leader in UK student and graduate One of China s leading live auction e-commerce platforms, connecting Heffel is a pioneer of online sales that started in 1999, and currently provides auction houses with e-commerce and marketing solutions, as art sales over 100,000 Chinese buyers with fine art auctions and sales across conducts live auction events bi-annually, one in the spring in Vancouver well as auction management software. the globe. The company works together with both domestic and and one in the fall in Toronto. As well as selling, commissioning and renting work created by emerging artists from prestigious art establishments, DegreeArt runs an Artists international leading auction houses, using a unique and secure payment system to guarantee all payments from Chinese buyers. HERITAGE AUCTIONS Invaluable lists over $4 billion of fine art, antiques and collectible items available at auctions around the world. Residency and Exhibition programme from its gallery, the Execution Services offered to buyers and sellers include free catalogue uploads, Invaluable s web properties host over three million unique visitors per Room, and takes part in art fairs throughout the year. extensive marketing options and a comprehensive service to both Founded: 1976 month and list hundreds of thousands of items available at auctions DROUOT LIVE buyers and sellers from the bidding stage to the delivery of purchases. EXPERTISSIM Dallas (HQ), Beverly Hills, San Francisco, New York and Europe Steve Ivy around the world every day. Invaluable bidders can search and buy from over 15,000 auctions annually. Founded: Jim Halperin (Co-Chairman), Invaluable s price database includes more than 58 million complete Paris Founded: 2008 Steve Ivy (Co-Chairman and CEO), auction results totaling more than $204 billion in value, including Online auction Paris Greg Rohan (President), information on more than 500,000 international artists. Gauthier de Vanssay and Igor Montoussé Todd Imhof (Executive Vice President) and Drouot Live is the online extension of Drouot s live auctions. It allows NextStage and CM-CIC Capital Privé Paul Minshull (COO) bidders and interested parties to bid online on a real-time basis and Click to buy and declining price auction Collectibles auctioneer to access all catalogues of the Drouot sales at all times. Expertissim offers works of fine and decorative art and collectibles Heritage Auctions seek to offer unbiased, transparent and friction- across 17 sub-categories. Works are sold using a declining bid system reduced trading, making the learning curve less steep and less in which each work listed is first offered at its high estimate, after which expensive for new collectors and sellers. Their mission is to be the the price is automatically lowered each week until arriving at the low world s most trusted and efficient marketplace and information resource estimate. One can buy a work at any point in this process, thereby for owners of fine art, jewels, rare collectibles and other precious objects. winning the object straight away. Prices range from approximately 150 at the low end to 60,000 at the high end. 34 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

19 Company profiles Company profiles LAURITZ.COM LIVEAUCTIONEERS LOTPRIVÉ.COM OCULA Founded: 2000 Founded: 2002 Founded: 2012 Founded: 2010 Denmark Manhattan France Hong Kong, New York, Shanghai, Auckland, Mette Rode Sundstrøm Julian R. Ellison and John Ralston Vincent Hutin Sydney, London, Tokyo and Berlin Bengt Sundstrøm Julian Ellison Vincent Hutin and Didier Beaumelle Simon Fisher Bengt Sundstrøm (Chairman) and Venture Capital International Online members brokerage platform Access to art from leading galleries Mette Rode Sundstrøm (CEO) Online auction aggregator Online auction/aggregator LotPrivé.com is an online platform specialising in sales of art and Ocula provides comprehensive online access to leading contemporary LiveAuctioneers is an online auction site that connects bidders to luxury goods, launched in December 2012 by Vincent Hutin and artists, exhibitions and galleries worldwide. It seeks to showcase the Lauritz.com is an international auction house with its headquarters auction houses across the world with sales happening in over 47 Didier Beaumelle. LotPrivé.com allows consumers to access a rich best in contemporary art to an influential global audience. in Herlev near Copenhagen and independently operated partner houses in Denmark, Sweden, Belgium and Germany. Lauritz.com countries. It also offers services such as catalogue publishing and allows online absentee bidding. They run LiveAuctioneers Timed Live online catalogue of art and luxury items. This catalogue is constantly renewed by objects from more than 60 houses in European sales, PADDLE8 partners pay royalties to Lauritz.com and operate their own (LATL), which consists of a timed auction platform that is pre-set to with fixed and preferential prices (30-70% below those practiced in Lauritz.com auction houses according to clear guidelines and close at a specific time for smaller sales. the traditional market). Founded: 2011 specific contractual arrangements. In the last quarter of 2014, it was reported that LiveAuctioneers MASTERART Founding team: New York (headquarters), London, Los Angeles Aditya Julka (CEO), Alexander Gilkes Lauritz.com has 1.2 million registered users, and saw 101 million in had had a record year in which the company helped to facilitate (President), and Osman Khan (COO) turnover in Lauritz.com has 21 auction houses in four countries nearly $3 billion worth of gross merchandise sales by connecting Founded: 2012 Mousse Partners, Founder Collective, where sellers and buyers can consign and view items for sale. approximately one million collectors and dealers from around the Global Winklevoss Capital, Sergey Skaterschikov, Lauritz.com has approximately 250 employees, of whom almost half globe with over 2,500 auction houses. Founder and Henry Blundell Jay Jopling, Damien Hirst, members of the are valuation specialists. LAVACOW LOFTY Investor: ArtSolution Online gallery inquire to buy Mellon family and Alexander von Furstenberg Online auction house Founded: 2012 MasterArt is an online platform for the display of quality fine art, antiques Paddle8 is an online collecting destination, presenting auctions of fine Founded: 2013 New York and collectibles from a select group of expert dealers. Services also art, design, collectibles, watches and jewellery, focusing on the middle Bucharest Mark Lurie include a digital library of art catalogues and virtual tours of the important market ($1,000-$100,000). Paddle8 seeks to remove the pain points Alexandru Bâldea, Cristina Olteanu Mark Lurie (Founder and CEO) fairs. The organisation offers a label of quality for the art on display and of collecting and benefits from a commission structure significantly and Manuela Plapcianu and Sarah Shinn Pratt (Director) brings together collectors, traders and art experts. MasterArt.com gives discounted from market norms to connect buyers and sellers around Artmark Founders Fund, TA Venture and Jose Marin free access to more than 17,000 artworks. the world. Every work on Paddle8 is vetted by an expert specialist or a Online auction Online marketplace (click-to-buy) NEW BLOOD ART trusted partner institution. Lavacow is the first online-only auction house from Eastern Europe. Lofty is an online marketplace for valuable fine art, antiques and It specialises in contemporary art, young and established artists, collectibles. Each item listed is reviewed by one of Lofty s 60 plus Founded: 2004 mostly from Central and Eastern Europe, together with original prints specialists and granted a five-year authenticity guarantee. Lofty seeks London by international icons. A novelty for online auctions, Lavacow displays to establish itself as the online market-leader for fine art, antiques and Sarah Ryan the first virtual auction room with fully animated auctioneer and bidders, collectibles priced between $500 and $50,000. Sourcing and selling original virtually mirroring the experience of a live auction. Users benefit from and limited edition artwork commissions at half the usual brick-and-mortar auction house norm. New Blood Art is a digital company that sources and sells original and limited edition artwork by rigorously selected emerging artists, at affordable prices. New Blood Art is committed to conducting a perpetual talent search, and bringing to the website only the most talented artists. 36 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report

20 Company profiles Company profiles RISE ART SAATCHI ART SOTHEBY S WFA ONLINE AG Founded: 2011 Launched: 2011 Founded: 2004 Founded: 2014 (Core business) London Santa Monica New York (headquarters) Weng Fine Art AG founded in 1994 Scott Phillips Sean Moriarty (CEO) and Bricks and clicks Zug, Switzerland Scott Phillips and Marcos Steverlyck Rebecca Wilson (Chief Curator) Rüdiger Weng Conor Coughlin and Rita Kettaheh Acquired by Demand Media Sotheby s online bidding service, BIDnow, is available for all Rüdiger K. Weng and Weng Fine Art AG Angel Investors including Jeff Fluhr, Online art gallery auctions except wine. Through BIDnow, auctions are broadcast on Nicolas Mak Chris Ingram and Andrew Grahame and and clients who have registered for a paddle 100% Weng Fine Art AG Great Oaks Capital Saatchi Art features the world s largest selection of original art and may place bids as if they were in the room. However, Sotheby s Online gallery and e-commerce platform Online gallery, click-to-buy e-commerce helps people all over the world find art and artists they love. The site online-only sales are separate to its BIDnow platform (which offers and art rental offers more than 500,000 original paintings, drawings, sculptures and works from evening sales), and hosted in collaboration with ebay WFA Online are positioning themselves to become a leader in the photographs by over 50,000 emerging artists from over 100 countries. at online art market, with the Weng Contemporary e-commerce platform, Rise Art aims to be the destination for contemporary art, hand-picked Saatchi Art aims to redefine the experience of buying and selling art as well as in the international high-end editions market. Acting either by experts. The team and independent advisors bring together top by providing art lovers with free art advisory services and an expertly Nearly 25% more buyers online in 2014 compared to as publisher, co-publisher or dealer, Weng Contemporary will seek to independent artists and place them alongside established artists from curated selection of art, while giving artists a convenient environment previous year. offer the most attractive editions of contemporary artists available in partner galleries to provide members with access to artwork on any in which to exhibit and sell their work. In 2014, mobile traffic accounted for 25% of total Sotheby s the market, for very competitive prices. Weng Contemporary do not list budget. Users can try the art in their home before they buy, with riskfree art rentals, and with every order on the site, an art kit is donated to SAFFRONART website traffic. Ten lots sold for more than $500,000 to online bidders across third-party offers. They can therefore guarantee prices and availability for all listed artworks, providing a high level of transparency and reliability. children s hospital wards as part of Rise Art s art-for-care charity. categories and salesrooms. Weng Contemporary will not only list artworks for sale, but also give Art rentals have grown as a percentage of the overall business, and well Founded: 2001 Mumbai (main office) VALUE MY STUFF quotes for editions that they are buying, allowing clients to sell their artworks for guaranteed prices at zero commission. over 50% of all rentals mature to purchase. The average basket on all orders is nearing 1,000. Dinesh Vazirani and Minal Vazirani Online auction Founded: 2009 YELLOWERKORNER.COM London The business has raised low levels of capital to focus on building a A platform for fine art and collectibles with over 14 years of experience Patrick van der Vorst Founded: 2006 trusted brand online, helping first-time collectors discover and own art. in auctions, Saffronart is committed to serving the growing community Patrick van der Vorst Galleries across Europe and the US THE SALEROOM of Indian collectors, while also creating a cultural bridge to India for both the global Indian Diaspora and the international community at large. Dragon investors Theo Paphitis and Deborah Meaden Alexandre de Metz, Paul-Antoine Briat 360 Capital Partners and Pierre Kosciusko-Morizet, Founded: 2001 Online art and antique valuation website, which offers expertise through Louis-Christophe Laurent, Philippe Mondan London and Seattle a network of over 50 specialists, all of whom used to work either for and Pierre Nollet Owner: ATG Media Christie s or Sotheby s. The platform guarantees the user a valuation Click-to-buy limited edition photography Anne Somers (CEO) within 48 hours of the appraisal request. Mobeus Equity Partners and ECI Partners According to a statement by YellowKorner, the concept is very simple: Online auction aggregator and market place It completes around 260 valuations per day, with an average value of to introduce the greatest photographers from all over the world and to 456. The most popular category is Chinese art. increase the number of copies of their work to make it accessible to as thesaleroom.com is one of Europe s leading platforms for fine art and many collectors as possible. Instead of offering ten prints at 5,000, antiques auctions. Users have the possibility to browse catalogues YellowKorner chooses to publish 500 at 100. and bid online in real-time with video and audio feeds. In 2014 the-saleroom.com hosted more than 7,300 catalogues and 3,848 live auctions, 22% more than in 2013 and sold over 90 million online. 38 The Hiscox Online Art Trade Report 2015 The Hiscox Online Art Trade Report